Entrepreneur’s wisdom about relationships transcends industries
Given that February is a month to recognize and nurture relationships, both personal and professional, there may be no one more appropriate than Barnett Helzberg to provide key insights to relationship-building. After selling Helzberg Diamonds—his family’s national chain of 100 jewelry stores—to financial guru Warren Buffet in 1995, Helzberg chronicled the lessons he learned and best practices in the book, “What I Learned Before I Sold to Warren Buffet.” His wisdom on how to connect and associate with others is especially relevant to financial institutions, given the hyper-competitive nature of the industry.
Particularly applicable to financial institutions is realizing the relationship between proactive communication, value and account holder retention. Early on, Helzberg adopted such a philosophy in his professional relationships.
“I carefully told people well in advance exactly what everything was going to cost them,” he describes, adding that most divorces in professional relationships are due to communications shortcomings, rather than quality of work.
In practice, these shortcomings can be minimized by providing your account holders with upfront communication about their accounts, including a fully-disclosed overdraft protection program or service.
After all, who could blame an uninformed account holder for becoming upset when faced with an unexpected fee, especially when transactions can clear accounts arbitrarily? If your credit union or bank employs a fee-maximization strategy, that negative reaction can grow, fester, and ultimately play a role in the account holder’s defection.
You can avoid many of these reactions by employing transparency. By telling your account holders the exact cost well in advance—at account opening and periodically thereafter—the account holders who may need to use your overdraft program will understand and appreciate its value. They can gain a sense of trust, knowing that your financial institution can reliably meet their needs.
With trust and reliability come integrity, and as Helzberg notes…integrity attracts the right kind of people to the company, ones who feel comfortable recommending it to others.
When you consider the dynamics of our industry—the fierce competition on every corner, un-banking trends and the newer non-traditional competition—the need for transparency, value and integrity continues to escalate. If January was the month when you made new resolutions and set your goals, February is an outstanding time to focus on relationship-building that’s beneficial throughout the year, and beyond.